Global Rates
WTI Crude
$93.63
+3.4% Iran-Israel
EUR/USD
~1.095
Stable pre-ECB
USD/JPY
~152
Yen firmed on BoJ 97%
US 10Y
~4.55%
Higher rates anchored
ECB June 11
92%
+25bp to 2.25%
BoJ June 16
97%
+25bp to 1.0%
Huge week: ECB decision THURSDAY (June 11) at 92% for +25bp to 2.25%, then BoJ decision MONDAY June 16 at 97% for +25bp to 1.0%. Both outcomes near-certainties. WTI $93.63 on Iran-Israel strikes supports hawkish case for both central banks. US May CPI (June 10) is a cross-asset catalyst — a cool print would still not derail ECB or BoJ given current inflation trajectories. BoJ has surged from our entry point (57%) to 97% — 8 days to resolution.
Today's Market Moves
BoJ +25bp Jun 16
57%→97%+40pp
Bloomberg confirms officials mulling June hike. 6-3 April vote showed clear momentum. 8 days to resolution.
ECB +25bp Jun 11
85%→92%+7pp
92% for 25bp hike on Thursday. Euro area HICP 3% April. Hawkish signals from Governing Council.
WTI Oil
89%→94%+5pp
Iran-Israel new strikes June 8. Hormuz partially disrupted. Hawkish for both ECB and BoJ via energy inflation.
BoJ No Change Jun
15%→2%-13pp
No-change probability collapsed to 2.25% as hike consensus solidified.
Screening Table
| # | Market | Expiry | Market Price | Fair Value | Gap (pp) | Direction | Volume | Confidence |
|---|---|---|---|---|---|---|---|---|
| 1 | BoJ +25bp Jun 16 | Jun 16 | 97% | 90% | -7pp | BUY YES | $$360K | 9/10 |
| 2 | ECB +25bp Jun 11 | Jun 11 | 92% | 92% | 0pp | NEUTRAL | $$526K | 8/10 |
| 3 | ECB No Change Jun 11 | Jun 11 | 6% | 6% | 0pp | NEUTRAL | $$526K | 8/10 |
| 4 | BoJ No Change Jun | Jun 16 | 2% | 8% | +6pp | NEUTRAL | $$360K | 7/10 |
| 5 | ECB +50bp Jun 11 | Jun 11 | 1% | 1% | 0pp | NEUTRAL | $$526K | 6/10 |
| 6 | BoJ +50bp Jun | Jun 16 | 1% | 1% | 0pp | NEUTRAL | $$360K | 5/10 |
| 7 | ECB Cut Jun 11 | Jun 11 | 0% | 0% | 0pp | NEUTRAL | $$526K | 9/10 |
| 8 | BoJ Cut Jun | Jun 16 | 0% | 0% | 0pp | NEUTRAL | $$360K | 9/10 |
Top 5 Opportunities
1
BoJ +25bp June 16 — YES
↑ BUY YES-7pp
Market price
97%
Fair value
90%
Gap: -7pp
BoJ has surged from our 57% entry to 97% today. Bloomberg reports officials actively discussing the June 16 hike to 1.0%. Governor Ueda hawkish; April 6-3 vote showed internal consensus building. Core inflation above 2% target; Iran energy pressures add upward risk. 8 days to resolution.
▵ Bull case
- Bloomberg: officials mulling June hike
- 6-3 April vote = internal consensus building
- Japan CPI above 2% target
- USD/JPY 152 = yen weakness adds import inflation
▿ Bear case
- Q1 GDP negative -0.5% (though revised)
- Global growth slowdown risk
- Hormuz shock could trigger flight to safety pause
2
ECB +25bp June 11 — YES
↑ BUY YES0pp
Market price
92%
Fair value
92%
Gap: 0pp
ECB hike in 3 days. 92% priced and fair value roughly matches — no gap to exploit. ECB position was exited June 2 on HICP trigger. Monitoring only.
▵ Bull case
- Euro area HICP 3% April
- Hawkish Governing Council signals
- Iran energy pressures = upside inflation risk
▿ Bear case
- Growth concerns in Germany
- ECB could pause citing geopolitical uncertainty
3
ECB No Change June 11 — NO
↑ BUY YES0pp
Market price
6%
Fair value
6%
Gap: 0pp
No change is priced at 6% — roughly fair given 92% hike probability. No opportunity here.
▵ Bull case
- ECB might cite geopolitical uncertainty as reason to pause
▿ Bear case
- 92% market consensus for hike
- HICP 3% well above 2% target
4
BoJ No Change June — NO
↑ BUY YES+6pp
Market price
2%
Fair value
8%
Gap: +6pp
BoJ no-change at 2.25% — lower than uncertainty justifies but with 8 days to resolution, risk-reward doesn't justify a new position.
▵ Bull case
- Geopolitical shock could force BoJ to hold
▿ Bear case
- Bloomberg confirms officials mulling hike
- Market 97% for +25bp
5
BoJ +50bp June — NO
↑ BUY YES0pp
Market price
1%
Fair value
1%
Gap: 0pp
50bp essentially zero probability. BoJ normalizes gradually. No opportunity.
▵ Bull case
- If inflation dramatically overshoots
▿ Bear case
- BoJ normalizes gradually
- Current rate 0.75% — 50bp would be aggressive